EXHIBIT 10.17
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of June 16,1997, by and between AURORA FOODS
INC. (the "Company"), a Delaware corporation, and Xxxx X. Xxxxxxx (the
"Employee").
W I T N E S S E T H:
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WHEREAS, upon the terms and subject to the conditions of this Agreement,
the Company desires to employ the Employee and the Employee desires to accept
employment by the company.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. Employment. Upon the terms and subject to the conditions of this
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Agreement, the Company hereby employs the Employee and the Employee hereby
accepts employment with the Company in the capacities hereinafter set forth.
2. Term of Employment. The term of this Agreement shall commence on or
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before June 30, 1997 hereof and shall continue in effect through June 30, 1998,
unless earlier terminated pursuant to Section 6 below (the "Term"); provided
that (i) on the first anniversary of the date hereof, the Term of this Agreement
shall be automatically extended for an additional 6-month period and each day
thereafter the Term shall be automatically extended by a day so that the Term
remaining under the Agreement shall remain at 6 months.
3. Duties: Extent of Services; Office and Location.
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(a) Duties. During the Term, the Employee shall serve as Chief
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Financial Officer of the Company and shall report to and carry out the lawful
directions of the President of the Company. The Employee shall perform the
duties, undertake the responsibilities and exercise the authority reasonably
required of such an employee of the Company, and shall have such other powers
and perform such additional executive duties as may be assigned to him from time
to time by the president of the Company.
(b) Extent of Services. Except for illness and permitted vacation
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periods, during the Term the Employee shall (i) devote his full time and
attention during normal business hours to the businesses of the Company and its
subsidiaries and Affiliates (as defined herein); (ii) use his best efforts to
promote the interests of the Company and its subsidiaries and Affiliates; (iii)
discharge such executive and administrative duties not inconsistent with his
position as may be assigned to him by the President; and (iv) serve, without
additional compensation, as a director or officer of any subsidiary of the
Company if elected as such.
(c) Office and Location. Employee shall perform services for the
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Company from the Company's corporate headquarters.
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4. Compensation.
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(a) Base Salary. In consideration of the services rendered by the
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Employee hereunder and provided that the Employee has substantially performed
all of his obligations provided for herein, the Company will pay to the Employee
a base salary (the "Base Salary") at the rate of $120,000 per year during the
Term. The Base Salary may be increased from time to time in the amount mutually
agreed to by the Employee and the Company to reflect the performance of the
Employee and additional responsibilities undertaken by the Employee. The Base
Salary shall be paid in accordance with the Company's normal payroll practice.
(b) Base Bonus. For so long as the Employee is the C.F.O. of the
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Company, the Company shall pay the Employee a bonus with respect to each fiscal
year or portion thereof during the Term in accordance with the following
provisions:
(i) If the Financial Results of the Company for a fiscal year
during the Term are at least 90% but less than 95% of the EBITDA Target for
such year, Employee shall be paid an amount equal to 20% of so much of his
Base Salary as was paid with respect to such year.
(ii) The Financial Results of the Company for a fiscal year
during the Term are at least 95% but less than 100% of the EBITDA Target for
such year, Employee shall be paid an amount equal to 30% of so much of his
Base Salary as was paid with respect to such year.
(iii) If the Financial Results of the Company for a fiscal year
equal or exceed 100% of the EBITDA Target for such year, Employee shall be
paid an amount equal to 40% of so much of his Base Salary as was paid with
respect to such year.
(c) Supplemental Bonus. In addition to the Base Bonus, if any, to
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which the Employee may be entitled under clauses (i), (ii) or (iii) of Section
4(b), for so long as the Employee is the C.F.O. of the Company, the Company
shall pay the Employee a bonus with respect to such fiscal year or portion
thereof during the Term in accordance with the following provisions.
(i) If the Financial Results of the Company for a fiscal year
during the Term are at least 105%, but less than 110% of the EBITDA Target for
such year, Employee shall be paid an amount equal to 5% of so much of his Base
Salary as was paid with respect to such year.
(ii) If the Financial Results of the Company for a fiscal year
during the Term are at least 110%, but less than 115% of the EBITDA Target
for such year, Employee shall be paid an amount equal to 10% so much of his
Base Salary as was paid with respect to such year.
(iii) If the Financial Results of the Company for a fiscal year
during the Term are at least 115% but less than 120% of the EBITDA Target for
such year, Employee shall be paid an amount equal to 15% of so much of his
Base Salary as was paid with respect to such year.
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(iv) If the Financial Results of the Company for a fiscal year
during the Term equal or exceed 120% of the EBITDA Target for such year, the
Employee shall be paid an amount equal to 20% of so much of his Base Salary as
was paid with respect to such year.
(d) For the purpose of this Agreement (1) the term "EBITDA Target"
shall mean the Company's projected earnings before interest, taxes,
depreciation and amortization, as contained in the Company's annual budget
which is approved by the Board of Directors of the Company (the "Board")
(without reference to any adjustments or revision, upwards or downwards, to
such projected earnings which are subsequently approved by the Board as part
of any subsequent revision to such annual budget), (2) the term "Financial
Results" shall mean the Company's annual financial results reflected in the
Company's annual audited financial statements and (3) the Company's 1997
fiscal year shall be deemed to have begun on December 31, 1996.
(e) Any bonus due under Section 4(b) and (c) shall be paid to the
Employee within 30 days of the publication of the Company's annual audited
financial statements for the relevant year.
(f) Employee shall be entitled to receive a bonus (if any) with
respect to a fiscal year during the Term pursuant to the terms of Section 4(b)
and (c) of this Agreement if the Employee shall be employed by the Company on
the last day of such fiscal year. Such entitlement shall not thereafter be
affected by the subsequent termination of Employee's employment with the
Company pursuant to any provision of Section 6 of this Agreement.
5. Other Employee Benefits.
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(a) During the Term, the Employee shall be entitled (i) to vacation
time in accordance with the Company's policy from time to time in effect; (ii)
to participate in all employee insurance and other fringe benefit programs,
including, without limitation, life, health, dental and accident insurance plans
and long term disability now or hereafter maintained by the Company for senior
executive or other salaried personnel for which the Employee is eligible; and
(iii) to participate in a pension plan with terms similar to those applicable to
executives of the Company.
(b) As of the date hereof, MBW Investors LLC will issue to Employee 8
Class D Units. Employee understands that these Class D Units are part of an
aggregate of 100 Class D Units issued or to be issued to operating management of
the Company. Employee understands that, in the discretion of the Chairman of MBW
Investors LLC, additional Class D Units may be issued to Employee. Employee
further understands that, as provided in the LLC Agreement, Class D Units in
addition to the initial 100 Class D Units may be issued by MBW Investors LLC to
other persons. Employee agrees to execute such documents as may be required or
reasonable requested by the Company of MBW Investors LLC in connection with the
issuance of Class D Units to Employee.
(c) It is contemplated that Employee shall have the opportunity to
purchase certain Class A Units (as defined in the LLC Agreement) of MBW
Investors LLC. It is also contemplated any such purchase of Class A Units would
be subject to a minimum investment of $25,000 with the maximum investment to be
determined by MBW Investors LLC. It is further contemplated that the Company
would loan to the
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Employee up to $75,000 for the purpose of purchasing Class A Units and that any
such loan would be repaid over a three year period with interest paid quarterly.
Employee understands, however, that the timing and the terms and conditions of
the opportunity, if any, to purchase Class A Units shall be solely determined in
the discretion of MBW Investors LLC.
6. Termination Provisions.
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(a) Termination for Cause. The President or the Board may terminate
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the Employee's employment hereunder for Cause, as hereinafter defined,
immediately upon written notice to the Employee. For purposes of this Agreement,
"Cause" shall mean (i) embezzlement, theft or other misappropriation of any
property of the Company or any Affiliate, (ii) gross or willful misconduct
resulting in substantial loss to the Company or any Affiliate or substantial
damage to the reputation of the Company or any Affiliate, (iii) any act
involving moral turpitude which results in a conviction for a felony involving
moral turpitude, fraud or misrepresentation, (iv) gross neglect of his assigned
duties to the Company or any Affiliate (v) gross breach of his fiduciary
obligations to the Company or any Affiliate, or (vi) any chemical dependence
which materially affects the performance of his duties and responsibilities to
the Company or any Affiliate; provided that in the case of the misconduct set
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forth in clauses (iv) and (vi) above, such misconduct shall continue for a
period of 30 days following written notice thereof by the Company to the
Employee. During the Term, the Employee shall be entitled to only one such
notice and right to cure for any single act or event. If the Employee's
employment is terminated for Cause, the Employee shall be entitled to receive
only the unpaid portion of the Base Salary then in effect which has accrued to
the date of termination, any other payments generally available to departing
employees of the Company (such as unused vacation and personal days) and any
bonus pursuant to Section 4 for the preceding fiscal year which has not been
paid as of the date of such termination. The Employee shall not be entitled to
receive any severance payment with respect to such termination.
(b) Termination By Reason of Permanent Disability. If at any time
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during the Term the Employee has been unable, as a result of physical or mental
illness or incapacity, to perform his duties hereunder for a period of four
consecutive months or for an aggregate of more than six months in any twelve
month period (a "Permanent Disability"), the Employee's employment hereunder may
be terminated by the President or the Board upon thirty days' written notice to
the Employee. If the Employee's employment is terminated by reason of Permanent
Disability, the Employee shall be entitled to receive only the unpaid portion of
the Base Salary then in effect which has accrued to the date of termination,
plus any other payments generally available to departing employees of the
Company (such as unused vacation and personal days), plus any bonus pursuant to
Section 4 for the preceding fiscal year which has not been paid as of the date
of such termination, plus an amount equal to six months of Employee's Base
Salary.
(c) Termination By Reason of Death. The Employee's employment
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hereunder shall automatically terminate on the date of his death. If the
Employee's employment is so terminated by his death, the Company shall pay to
the Employee's estate in addition to the unpaid portion of the Base Salary then
in effect through date of Employee's death plus an amount equal to six months of
Employee's Base Salary plus any other payments generally available to departing
employees of the Company (such as unused vacation and personal days), plus any
bonus pursuant to Section 4 for the
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preceding fiscal year which has not been paid as of the date of the Employee's
death. Such amount shall be paid within thirty days after the date of his death
if a personal representative has been appointed by the end of such thirty day
period or, if a personal representative has not been appointed by the end of
such thirty day period, promptly after a personal representative has been
appointed.
(d) Termination Without Cause. The President or the Board may
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terminate the Employee's employment hereunder at any time for any reason without
Cause in which case the Employee shall be entitled to receive an amount (the
"Severance Amount") equal to the Base Salary the Employee would have been
entitled to receive through the end of the then current Term (without giving
effect to any future extension pursuant to Section 2 hereof). The Severance
Amount shall be in lieu of any other severance payment to which Employee may be
otherwise entitled under any other severance plan maintained by the Company. The
Severance Amount shall be paid within 30 days of such termination. In addition,
the Employee shall be entitled to receive any other payments generally available
to departing employees of the Company (such as unused vacation and personal
days), plus any bonus pursuant to Section 4 for the preceding fiscal year which
has not been paid as of the date of such termination, plus, to the extent the
Company achieves the required percentage of the EBITDA Target for the fiscal
year in which such termination occurs.
(e) Termination by Employee. Notwithstanding any other provisions of
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this Agreement, Employee shall have the right to terminate the employment
relationship under this Agreement at any time prior to the expiration of the
Term for any of the following reasons: (i) a material breach by the Company of
any provision of this Agreement that remains uncorrected for 30 days following
written notice of such breach by Employee to the Company or (ii) for any other
reason whatsoever, in the sole discretion of the Employee, upon 90 days prior
written notice to the Company. If the Employee terminates his employment with
the Company pursuant to clause (i) of this Section 6(e), the Employee shall be
entitled to receive the Severance Amount plus any other payments generally
available to departing employees of the Company (such as unused vacation and
personal days), plus any bonus pursuant to Section 4 for the preceding fiscal
year which has not been paid as of the date of such termination. If the Employee
terminates his employment with the Company pursuant to clause (ii) of this
Section 6(e), the Employee shall be entitled to receive the unpaid portion of
the Base Salary then in effect which has accrued to the date of termination plus
any other payments generally available to departing employees of the Company
(such as unused vacation and personal days), plus any bonus pursuant to Section
4 for the preceding fiscal year which has not been paid as of the date of such
termination.
7. Covenants of the Employee.
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(a) Non-Competition. Until the later of (x) the first anniversary of
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the date of the termination of the Employee's employment hereunder and (y) the
end of the then current Term in effect on the date of such termination, the
Employee shall not, directly or indirectly, be associated with any entity which
competes with the Company or any of its Affiliates that are subsidiaries of MBW
Investors LLC or for which the Employee renders substantial services and whose
primary business is, or personally engage in, the same or similar grocery
product line of business of the Company or any of its Affiliates, whether as a
director, officer, employee, agent, consultant, partner, owner, independent
contractor or otherwise. For the purpose of this Agreement, the
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term "Affiliate" means, with respect to the Company, any person or entity which,
directly or indirectly, controls, is controlled by or under common control with
the Company, with "control" to be based on the ownership of 50% or more of the
voting securities (or their equivalent) of a particular entity.
(b) Non-Solicitation of Employees of the Employer. Until the later of
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(x) the first anniversary of the date of the termination of the employment of
the Employee hereunder and (y) the end of the then current Term in effect on the
date of such termination, the Employee shall not, and shall cause each business
or entity with which he shall become associated in any capacity not to, solicit
for employment or employ any person who is then, or who was at any time after
the date four months prior to the date of such termination, employed in a
professional or managerial position by the Company, its subsidiaries or
Affiliates.
(c) Confidentiality. The Employee agrees and acknowledges that the
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Confidential Information (as hereinafter defined) of the Company and its
subsidiaries and affiliates, is valuable, special and unique to their business,
that such business depends on such Confidential Information; and that the
Company wishes to protect such Confidential Information by keeping it
confidential for the use and benefit of the Company and its subsidiaries and
Affiliates. Based on the foregoing, the Employee agrees to undertake the
following obligations with respect to such Confidential Information.
(i) The Employee agrees to keep any and all Confidential
Information in trust for the use and benefit of the Company and its
subsidiaries and Affiliates.
(ii) The Employee agrees that, except as required by applicable
law or as authorized in writing by the Board, he will not at any time during
or after the termination of his employment hereunder, disclose, directly or
indirectly, any Confidential Information of the Company or any of its
subsidiaries or Affiliates;
(iii) The Employee agrees to take all reasonable steps
necessary, or reasonably required by the Company, to ensure that all
Confidential Information is kept confidential for the use and benefit of the
Company and its subsidiaries and Affiliates; and
(iv) The Employee agrees that, upon termination of his employment
hereunder or at any other time the Company may in writing so request, he will
promptly deliver to the Company all materials constituting confidential
Information (including all copies thereof) that are in his possession or under
his control. The Employee further agrees, that if requested by the Company, to
return any Confidential Information pursuant to this subparagraph (iv), he will
not make or retain any copy or extract from such materials.
For purposes of paragraph (c) at this Section 7, "Confidential
Information" means any and all information developed by or for the Company or
any of its subsidiaries or Affiliates of which the Employee gains or has
acquired knowledge during or prior to the Term by reason of his employment with
the Company that is (A) not generally known in any industry in which the Company
or any of its subsidiaries or Affiliates is or may become engaged or (b) not
publicly available. Confidential
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Information includes, but Is not limited to, any and all information developed
by or for the Company or any of its subsidiaries or Affiliates concerning plans,
marketing and sales methods, customer lists, materials, processes, business
forms, procedures, devices, plans for development of products, services or
expansion into new areas or markets, internal operations, and any trade secrets
and proprietary information of any type owned by the Company or any of its
subsidiaries or Affiliates, together with all written, graphic and other
materials relating to all or any part of the same.
8. Successors: Assignment.
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(a) The Company. The Company may assign any of its rights and
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obligations hereunder, without the written consent of the Employee, in
connection with a merger, consolidation or sale of all or substantially all of
the business or assets of the Company. This Agreement shall be binding upon and
shall inure to the benefit of the Company and its successors and assigns.
(b) The Employee. Neither this Agreement nor any right or interest
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hereunder may be assigned by the Employee, his beneficiaries, or legal
representatives without the prior written consent of the Board; provided,
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however, that nothing in this Section 8 shall preclude (i) the Employee from
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designating a beneficiary to receive any benefit payable hereunder upon his
death, or (ii) the executors, administrators, or other legal representatives of
the Employee or his estate from assigning any rights hereunder to distributees,
legatees, beneficiaries, testamentary trustees or other legal heirs of the
Employee.
9. Notices. All notices and other communications hereunder shall be in
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writing and shall be deemed to have been given when delivered by hand, mailed by
first-class registered or certified mail, postage prepaid and return receipt
requested, or delivered by overnight courier addressed as follows:
(i) If to the Company:
AURORA Foods, Inc.
Community Corporate Center
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
with a copy to:
MBW Investors LLC
c/o Dartford Partnership, L.L.C.
000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
with a copy to:
XxXxxx De Leeuw & Co
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
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Attention: Xxxxxxx Xxxxx
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(ii) If to the Employee:
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxx 00000
or, in each case, at such other address as may from time to time be specified to
the other party in a notice similarly given.
10. Governing Law: Jurisdiction. The validity, interpretation,
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construction and performance of this Agreement shall be governed by the laws of
the State of Ohio applicable to contracts executed and to be performed entirely
within said State. Any judicial proceeding brought against any of the parties to
this Agreement or any dispute arising out of this Agreement or any matter
related hereto may be brought in the courts of the State of Ohio or in the
United States District Court for the Southern District of Ohio, and, by
execution and delivery of this Agreement, each of the parties to this Agreement
accepts the jurisdiction of said courts, and irrevocably agrees to be bound by
any judgment rendered thereby in connection with this Agreement. The foregoing
consent to jurisdiction shall not be deemed to confer rights on any person other
than the respective parties to this Agreement.
11. Expenses. If a dispute arises out of or related to this Agreement, if
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either party to the Agreement brings legal action to enforce the terms of the
Agreement, the party who prevails in such legal action, whether plaintiff or
defendant, in addition to the remedy or relief obtained in such legal action,
shall be entitled to recover his or its expenses incurred in such legal action,
including without limitation, court costs and attorneys fees. A party shall be
deemed to have prevailed in such a legal action if such action is concluded
pursuant to a court order or final judgment in favor of such party which is not
subject to appeal, a settlement agreement or dismissal of the principal claims.
12. Entire Agreement. This Agreement contains the entire agreement of the
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parties and their Affiliates relating to the subject matter hereof and
supersedes all prior agreements, representations, warranties and understandings,
written or oral, with respect thereto.
13. Severability. If any term or provision of this Agreement or the
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application thereof to any person, property or circumstance shall to any extent
be invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons, property or circumstances other than those
as to which it is invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Agreement shall remain valid and enforceable to
the fullest extent permitted by law.
14. Remedies.
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(a) Injunctive Relief. The Employee acknowledges and agrees that the
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covenants and obligations of the Employee contained in subsections (a), (b) and
(c) of Section 7 hereof relate to special, unique and extraordinary matters and
are reasonable and necessary to protect the legitimate interests of the Company
and its subsidiaries and Affiliates and that a breach of any of the terms of
such covenants and obligations will cause the Company irreparable injury for
which adequate remedies at
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law are not available, therefore, the Employee agrees that the Company shall be
entitled to an injunction, restraining order, or other equitable relief from any
court of competent jurisdiction, restraining the Employee from any such breach.
(b) Remedies Cumulative. The Company's rights and remedies under the
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Section 14 are cumulative and are in addition to any other rights and remedies
the Company may have at law or in equity.
15. Withholding Taxes. The Company may deduct any federal, state or local
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withholding or other taxes from any payments to be made by the Company hereunder
in such amounts which the Company reasonably determine are required to deduct
under applicable law.
16. Amendments, Miscellaneous, etc. Neither this Agreement nor any term
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hereof may be changed, waived, discharged or terminated except by an instrument
in writing signed by the party against which such change, waiver, discharge or
termination is sought to be enforced. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. The headings contained in
the Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
17. Survival. The covenants set forth in Sections 4(f), 6 and 7 of this
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Agreement shall survive and shall continue to be binding upon the parties
notwithstanding the termination of this Agreement for any reason whatsoever. The
covenants set forth in Section 7 of this Agreement shall be deemed and construed
as separate agreements independent of any other provision of this Agreement. The
existence of any claim or cause of action by the Employee against Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by Company of any or all covenants.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first written above.
AURORA FOODS INC.
By: /s/ Xxxxxx X. Xxxxxxx
_____________________________
Name: Xxxxxx X. Xxxxxxx
Title: President
/s/ Xxxx X. Xxxxxxx
_____________________________
Xxxx X. Xxxxxxx
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